FRENCH telecommunications giant Alcatel is looking to pioneer a cut-price regional in-flight telephone network in Asia.

It claims its terrestrial flight telephone system (TFTS) will cost passengers less than US$4 for the first unit used, compared with a hefty average of $18 on the existing satellite system being used by airlines in the region.

Alcatel says TFTS allows four passengers on a plane to phone out at the same time, which is not possible with the conventional satellite system.

With its new system, calls processed by on-board equipment are passed on to the international telephone networks through ground stations.

One drawback with TFTS is that passengers are unable to make calls when flying over the middle of an ocean or desert, because calls need to be passed on via a ground station to the public switch network.

Because of this limitation, Alcatel is looking to complement rather than replace the existing satellite phone systems gradually being adopted by some of Asia's more progressive carriers, including Singapore Airlines.

Patrice Blanchet, Alcatel's regional representative in Singapore, said: ''We do not want airlines to drop their present system in favour of ours. Both systems are complementary. We expect airlines to carry both systems on board.

''The satellite system is appropriate when flying over vast oceans, while our ground system is better when over land,'' Mr Blanchet said.

The TFTS system has been tried, tested and expanded enormously in Europe. The system is ideal for regional flight operators on the continent because of its sprawling land mass.

In Europe, 40 TFTS ground stations have so far been installed.

The service will be available over the whole of Western Europe by the end of the year.

European telecommunications companies have invested in the ground equipment, while airlines or service providers have taken responsibility for the internal fitting out the aircraft.

Airlines charge their passengers for the use of the phones while paying a linked royalty to operators for the service.

For the past six months, Mr Blanchet and his team have been busy presenting their system to telecommunications groups in Asia and say some are definitely interested.

Talks have been underway with Singapore Telecom, Malaysian Telecom, Indonesia's PG Telecom, Telstra in Australia and Telecom New Zealand.

Hong Kong, China and Thailand are Alcatel's other targets this year.

Mr Blanchet said: ''Only about 10 ground stations are needed to cover Southeast Asia, and the potential hard currency revenue is very attractive for telecom operators.'' Further ground stations would be needed should the Alcatel network be allowed to expand over the vast China region, Mr Blanchet said.